Country's chief banker, chairman of the National Bank of Kazakhstan Kairat Kelimbetov encourages Kazakhstanis’ believes again with an endearing smile that the situation is under control. However, most got their fingers burnt last time and, thus, understand that “Smile and wave, boys!” motto is rather enthusiastic than realistic in the conditions of today’s economical situation. In November 2014 Tenge might be pushed to accept another tough challenge: lifted sanctions against Iran. If this happens, oil of the Islamic Republic will pour in the free market to significantly knock down world prices for hydrocarbons. This in turn would cause quite difficult times for the oil price-based economy of Kazakhstan.
Here is a little background. According to the most recent statistical data Iran disposes about 17 percent of the world's gas reserves and about 11 to 12 percent of the world's oil reserves. In fact, Iran ranks first in total number of oil and gas reserves. On top of that, country ranks first in the world by volume of hydrocarbons. Obviously, it makes Iran one of the major players ensuring international energy security, especially that the forecasted exhaustion of own resources in many countries as well as the economic growth will dramatically increase the demand for oil in the future. But apparently all this is too good to be true… In reality the Iranian oil almost blocked from the world market, thanks to a series of sanctions led by the United States. The world's elite is concerned about what Iran is "hiding": the production of enriched uranium is suspicious to be used strictly for peaceful nuclear energy for domestic purposes... Requirements that the Islamic Republic follows today have been set in November last year - no nuclear weapons, an action plan is developed... Yesterday, Reuters reported that Iran successfully fulfills the conditions of the agreement with the six of international mediators on its nuclear program, ratified in Geneva in November 2013. So, most likely, economic sanctions against the country will be lifted in November this year.
"In order for pre-conditions weakening the national currency to re-emerge, the Russian Ruble has to drop down to 43 per dollar, and oil prices to fall down to $80 a barrel" - said Kelimbetov.
Our budget is planned at the rate of oil price of $90 per barrel. Today’s price is $93 per barrel. Honestly, such "safety cushion” does not provide with a proper comfort. If "black gold" sags below the forecasted values, there would be no choice but to cut, truncate, and shorten and so on.
And worse, if prices happen to drop below Mr.Kelimbetov’s $80 per barrel, the advice for those in the most optimistic mood will be to start, if not yet, believing in God.